Marigold Company constructed a building at a cost of $2,288,000 and occupied it beginning in January 2001. It was estimated at that time that its life would be 40 years, with no salvage value. In January 2021, a new roof was installed at a cost of $312,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $166,400. (a) Correct answer icon Your answer is correct. What amount of depreciation should have been charged annually from the years 2001 to 2020? (Assume straight-line depreciation.) Depreciation per year $ eTextbook and Media List of Accounts Attempts: 1 of 9 used (b) Partially correct answer icon Your answer is partially correct. What entry should be made in 2021 to record the replacement of the roof? (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record the disposition of the old roof.) (To record the installation of the new roof.)
Marigold Company constructed a building at a cost of $2,288,000 and occupied it beginning in January 2001. It was estimated at that time that its life would be 40 years, with no salvage value. In January 2021, a new roof was installed at a cost of $312,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $166,400. (a) Correct answer icon Your answer is correct. What amount of depreciation should have been charged annually from the years 2001 to 2020? (Assume straight-line depreciation.) Depreciation per year $ eTextbook and Media List of Accounts Attempts: 1 of 9 used (b) Partially correct answer icon Your answer is partially correct. What entry should be made in 2021 to record the replacement of the roof? (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record the disposition of the old roof.) (To record the installation of the new roof.)
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.8MCP
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
Marigold Company constructed a building at a cost of $2,288,000 and occupied it beginning in January 2001. It was estimated at that time that its life would be 40 years, with no salvage value.
In January 2021, a new roof was installed at a cost of $312,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $166,400.
In January 2021, a new roof was installed at a cost of $312,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $166,400.
(a)
Correct answer icon
Your answer is correct.
What amount of depreciation should have been charged annually from the years 2001 to 2020? (Assume straight-line depreciation.)
| Depreciation per year |
$
|
eTextbook and Media
List of Accounts
Attempts: 1 of 9 used
(b)
Partially correct answer icon
Your answer is partially correct.
What entry should be made in 2021 to record the replacement of the roof? (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Account Titles and Explanation
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Debit
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Credit
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|
|
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|
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|
|
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(To record the disposition of the old roof.)
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(To record the installation of the new roof.)
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